Impacts On Long Term Supply And Service Agreements

We are all wrestling with the ramifications of a volatile oil price and, as lawyers, we are starting to see the early impacts of this new paradigm. Immediate, direct effects such as the cancellation of projects in the oil & gas sector due to economic unviability, and layoffs in areas with higher production costs such as the North Sea, are already starting to seep into the wider economy, and their final impact is still unknown. Questions, such as how net crude importing nations might use the additional funds now in their coffers, and how net exporters such as Venezuela, Nigeria and Russia can fill the income gap, are now at the forefront of global attention. What is certain is that there will be winners and losers, and adjusting quickly to the new climate will be key to survival and success.